The global equity markets have turned volatile amid rising concerns over inflation, geopolitical tensions, and delays in rate cuts. In this volatile environment, investors should look to earn a stable passive income by investing in high-yielding dividend stocks. Meanwhile, here are my four top picks.
Enbridge
Enbridge (TSX:ENB) transports oil and natural gas across North America through its pipeline network. Besides, it is expanding its presence in the utility and renewable energy space. The company’s cash flows are largely predictable and stable, as long-term contracts and regulated assets generate around 98% of its adjusted EBITDA (earnings before interest, tax, depreciation, and amortization). Supported by its predictable cash flows, the company has been paying dividends for 69 years and has raised the same for the previous 29 years at an annualized rate of 10%. Meanwhile, the company currently offers an impressive forward dividend yield of 7.48%.
Further, Enbridge is expanding its presence in the natural gas utility segment by acquiring East Ohio Gas Company. It is also working on closing two other deals, which could make the company the largest natural gas utility company in North America. The company also continues its $24 billion secured capital program and expects to put $4 billion of assets into service annually in 2024 and 2025. Given these growth prospects, I believe Enbridge’s future dividend payouts are safer, making it an attractive buy.
BCE
Another high-yielding dividend stock worth adding to your account would be BCE (TSX:BCE), which offers an impressive dividend yield of 8.82%. Telecom companies enjoy healthy cash flows due to their recurring cash flows, thus allowing them to reward their shareholders by consistently raising their dividends. BCE has raised its dividend for 16 consecutive years. Meanwhile, the sector has been under pressure over the last 12 months amid rising interest rates and unfavourable regulatory decisions.
Despite the near-term weakness, BCE’s long-term growth potential looks healthy, with the growing demand for telecommunication services amid digitization and growth in remote working and learning. Besides, the telco is also expanding its 5G infrastructure and has recently acquired 939 licenses. The company has also taken several cost-cutting initiatives and slashed its capital expenditures, thus increasing its free cash flows. So, I believe BCE is well-positioned to continue rewarding its shareholders with healthy dividends.
Pizza Pizza Royalty
Pizza Pizza Royalty (TSX:PZA) operates Pizza Pizza and Pizza 73 brand restaurants through its franchises. Given its asset-light business model and stable cash flows from royalties collected from franchises based on their sales, the company generates stable cash flows. Besides, its solid same-store sales growth and restaurant expansion have boosted its financials, thus allowing it to raise its dividend three times last year. It currently pays a monthly dividend of $0.0775/share, with its forward yield at 6.93%.
Meanwhile, PZA added 45 new restaurants to its royalty pool this year. However, removing 14 restaurants that had ended their operations, its restaurant count increased by 31 units to 774 this year compared to 743 in 2023. Further, the company is constructing several restaurants and hopes to expand its traditional restaurant count by 3 to 4% this year. Besides, the company also focuses on menu innovation and marketing and promotional activities, which could continue to drive its same-store sales. Considering all these factors, I believe PZA would be an excellent buy for income-seeking investors.
NorthWest Healthcare Properties REIT
My final pick would be NorthWest Healthcare Properties REIT (TSX:NWH.UN), which owns and operates 219 healthcare properties across six countries. It enjoys a healthy occupancy and collection rate of 97% and 99%, respectively. The healthcare REIT has signed long-term lease agreements with its tenants, with a WALE (weighted average lease expiry) of over 13 years. Also, most of its lease agreements are inflation-indexed, thus shielding its financials against rising prices.
Further, NorthWest Healthcare has strengthened its financial position through non-core asset sales, slashing dividends, and refinancing its debt facilities. Despite dividend cuts, its forward dividend yield stands at a juicy 7.13%. Given its recent initiatives to strengthen its balance sheet and stable cash flows, I believe NorthWest’s dividend payouts are safe, making it an ideal buy.
